One of the main tasks of declaration is not only the payment of tax to the budget, but also the rebate to taxpayers of part of the sums of tax paid from their wages during the reporting year. How to use the right to a tax rebate and what types of income can be included in it read further.
The right to tax rebate
A tax rebate for natural persons who are not business entities is a documented amount (value) of expenses incurred by a resident taxpayer in connection with the purchase of goods (works, services) from resident natural or legal entities during the reporting year, which is allowed to be used to reduce total annual taxable income, received as a result of such reporting year in the form of wages and/or dividends, in the cases specified by the Tax Code of Ukraine (hereinafter – the Tax Code).
The tax rebate includes expenses actually incurred by the taxpayer during the reporting tax year, confirmed by relevant payment and settlement documents identifying the seller of goods (works, services) and the person applying for a tax discount (their buyer (recipient), in particular, receipts, fiscal or commercial receipts, profitable cash orders.
Incurred expenses are also confirmed by copies of contracts, if available. The specified documents must necessarily reflect the cost of such goods (works, services) and the term of payment for such goods (works, services).
Copies (except for electronic settlement documents) are submitted together with the tax declaration, and the originals of these documents are not sent to the supervisory authority, but are subject to the taxpayer’s storage during the statute of limitations established by the Tax Code.
The total amount of the tax rebate charged to the taxpayer in the reporting tax year may not exceed the amount of the annual total taxable income of the taxpayer, calculated as wages, reduced taking into account the provisions of item 164.6 of the Tax Code, except for the case specified in item 166.4.4 of the Tax Code.
If by the end of the tax year following the reporting one, the taxpayer has not exercised the right to the tax rebate based on the results of the reporting tax year, such right shall not be carried over to subsequent tax years.
Expenses included in the tax rebate
The list of expenses allowed to be included in the tax rebate is determined by item 166.3 of the Tax Code. These are, in particular:
- part of the amount of interest paid by such a taxpayer for using a mortgage housing loan;
- donations or charitable contributions to non-profit organizations;
- amount of funds paid to domestic educational institutions to compensate for the cost of education by the taxpayer and/or family member of the first degree of consanguinity;
- amount of expenses for payment of insurance payments (insurance contributions, insurance premiums);
- amount of costs for the payment of assisted reproductive technologies and payment of the cost of state services related to the adoption of a child;
- amount of money paid in connection with the conversion of the vehicle;
- amount of expenses for the payment of expenses for the construction (purchase) of affordable housing, defined by law;
- amount of money in the form of rent (for internally displaced persons);
- amount for the treatment of acute respiratory disease COVID-19;
- amount of expenses for the purchase of shares (other corporate rights), the issuer of which is a legal entity that has acquired the status of a resident of Diia City.
You can use the right to a tax rebate by submitting a declaration of assets and income to the tax inspectorate at the place of registration. The deadline for submitting the tax return is the last day of the year.
